With the holiday season upon us, we help retailers fine-tune their merchandising plans and order smarter so they can reap more sales
When Sally Furrer, a merchandising specialist and consultant based in Libby, Mont., saw that a Midwestern retail jewelry client’s inventory levels were at their highest point on Dec. 31, 2013—instead of a month prior—she knew a heart-to-heart was in order. “You should have the most merchandise a month before you anticipate a higher level of sales,” says Furrer.
Late deliveries or anemic amounts of product can stunt holiday sales and cripple cash flow; meanwhile, inadequate assortments of price points can turn away buyers. What’s more, placing orders at the wrong cost and time of year could result in “a store full of merchandise and little cash at the end of the season,” says Abe Sherman, CEO of Buyers Intelligence Group (BIG) in Napa, Calif.
We asked a few retail experts for advice on ordering smarter for the holidays (and beyond).
Holiday merchandise doesn’t always work year-round.
A former BIG client in Southern California struggled to streamline inventory, eliminate nonperformers, and improve cash flow only to rack up more than $100,000 in accounts payable shortly after Christmas. The problem: The retailer reordered holiday pieces that traditionally don’t perform well come Jan. 1. “Some merchandise sells for Christmas, Valentine’s Day, and Mother’s Day, but not for the rest of the year—and should not be replaced after certain dates,” Sherman says. “Diamond bracelets will sell better in the fourth quarter than they will throughout the year.”
Don’t be afraid to try something new.
Tony Prater, CEO of Jensen Jewelers, based in Twin Falls, Idaho, admits waiting “longer than we should have” to bring in Chamilia, which wound up selling well for the 14-store chain. Prater says he failed to jump on the bead bandwagon right away because the pieces reminded him of the flat, Italian-made steel items that predated today’s popular varieties. “They helped us reach a customer we probably would have missed,” he says.
Strategize your price points.
Two-finger ring in 14k yellow gold with 32.11 ct. Australian boulder opal and 0.8 ct. t.w. brown diamonds; $4,700; Parlé Jewelry Designs, Pocatello, Idaho; 208-233-4059; parlegems.com
Experts advise analyzing categories by price point, and buying into those that show the highest rates of return. Fill in price points by repricing existing items, suggests Sherman: “Convert your slow movers into cash and get healthy by the end of the season.”
The holidays, says Amy Dudzik, a buyer for Borsheims in Omaha, Neb., are “a good time to take a lower margin since the store’s sales are stronger during this time.”
Lisa Bridge, vice president of education of Ben Bridge in Seattle, scrutinizes sales history before placing orders. “We look at what categories have been strongest in past holiday seasons as well as what is trending recently—a color, a type of jewelry, or a design,” says Bridge.
Ditto for Dudzik. “If a diamond cross turned four times this year, make sure to have at least that many on hand to support the higher volume of sales that will likely occur in the holiday season,” she says.
Jennifer Perelman, president of King’s Jewelry in New Castle, Pa., with eight stores across Pennsylvania and Ohio, couldn’t agree more: “Make sure what you’re purchasing is what you’re actually selling.”
Bet on your best sellers.
24-inch freshwater cultured pearl wrap bracelet or necklace; $135; Nikki Lissoni at Quality Gold, Fairfield, Ohio; 800-354-9833; qgold.com
Always keep your top sellers on the shelf. If you advertise a piece and run out, the promotion is wasted—and the situation is embarrassing. “You look silly in front of customers,” says David Perelman, vice president of King’s.
“Work with your suppliers to communicate what is being promoted so they can stock some backup for you for immediate shipment,” Dudzik urges. And make reordering your mantra. “Customers have already said this is what they want to buy, so have it in cases,” Furrer says.
For many jewelers, bridal is a perennial holiday seller. “December is the number 1 month for engagements,” says Furrer. “Lots of advertising dollars are spent on gifts while bridal gets a little neglected.” This year, Prater, who has a steady inventory of loose diamonds in sizes of 1 ct. and larger, is stocking up on customizable bridal options to speak to that growing trend.
Many offer advice on what to order for the holidays, but Sherman has a mathematical formula for how much: Take your November and December sales; then deduct special orders (use 20 percent if you’re unsure) and reorders of fast sellers and never-outs—that is, pieces you always want in stock, such as diamond studs and hoop earrings (use 30 percent if you’re unsure). “Since this is going to wind up being roughly half of your sales for those two months, you can get an idea of how little new inventory you can buy in order to get your inventory to the proper year-end levels,” he says.
Be creative—and have a little fun!
While running reports, balancing stock, having an up-to-date point-of-sale system to keep hot sellers in stock, and monitoring cash flow all facilitate bottom-line health, you also need to get shoppers excited about holiday lines! Tap into vendor savvy to educate staff, utilize contests to incentivize the sales force, and host themed events to drive awareness to specific collections.
“It’s something people will remember,” Furrer says. She recalls a Midwestern retailer who held an intimate dinner in fall 2013 with 20 Roberto Coin–loving couples and the designer himself. The result? “A buying frenzy!”